Continental earnings margin for 2022 near lower end of outlook, preliminary figures show

BERLIN (Reuters) -Continental reported a 5% adjusted earnings margin in 2022 in preliminary figures released on Tuesday, towards the lower end of its outlook, with sales of 39.4 billion euros ($42.55 billion).

The auto parts supplier had said in November it expected to hit the upper end of its adjusted earnings forecast but warned the business environment was highly volatile.

It had also warned it expected to pass more energy and labour costs onto customers in the coming year.

In the automotive sector, which began to see recovery in the third quarter after a turbulent first half amid lockdowns in China and war in Ukraine, the adjusted earnings margin was -0.2% for the year, but the fourth quarter was stronger with a 2.1% margin.

In the tires sector, the company reported a 13.1% annual margin but a slightly lower fourth quarter margin at 10.3%.

Higher production costs and restrictions in China due to COVID-19 pushed down margins in the ContiTech group sector, reaching 4.7% for the year, below the forecast of 6% to 7%.

The company said lower than expected cash flow resulted in adjusted free cash flow of around 200 million euros, far below its forecast of 600 million to 800 million euros.

It releases full results for the year 2022 on March 8.

($1 = 0.9260 euro)

(Reporting by Victoria Waldersee; Editing by Jonathan Oatis and Andrea Ricci)